The Dutch arm of South African internet titan Naspers, Prosus announced on Wednesday it would sell a 2% stake in software giant Tencent worth $15 billion (R218 billion) at current prices in an accelerated offering to institutional investors.
The sale would lower Prosus stake in Tencent to 28,9% from 30,9%.
Prosus intends to use the proceeds of the sale to increase its financial flexibility to invest in growth, plus for general corporate purposes.
“Tencent is one of the world’s best growth enterprises. It has consistently delivered value since listing in 2004. Prosus’s commitment to Tencent remains steadfast,” Prosus Chair Koos Bekker said.
“Through the sale of this small portion, Prosus intends to fund continued growth in our core business lines and emerging sectors, as well as allow for complementary acquisitions.”
Prosus also announced a commitment not to sell any further Tencent shares for at least
the next three years.
“We have informed Tencent of our intention, which is understood and supported by Tencent. We commit that we will not sell further Tencent shares for at least the next three
years, in line with our long-term belief in the business,” said Bekker.
Prosus has a track record of generating good returns by investing across the consumer internet space. The group takes a long-term approach to capital allocation across its operations and investments, and this approach now extends to its asset base – directly and indirectly via its own stock.
Prosus CEO Bob van Dijk highlighted that the COVID-19 pandemic has accelerated digital
transformation across the group’s growth sectors, mainly online classifieds, food delivery,
payments and fintech, education, and ecommerce.
“The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock.”
As Europe’s largest listed consumer internet company by asset value, Prosus gives global internet investors direct access to Naspers’s portfolio of international internet assets through exposure to China, India and other high-growth markets, as well as to the global tech sector.
Citigroup, Goldman Sachs and Morgan Stanley have been appointed Joint Global Coordinators and Joint Book Runners to manage the transaction. Books are open now and are expected to close prior to the Hong Kong opening. The Joint Global Coordinators reserve the right to accelerate closing of the books.